Businesses in all segments of the automotive industry are currently facing a range of challenges that require dedicated and effective solutions.
During the past 18 months, the pandemic has topped the list of concerns for most companies in the automotive sector, with knock-on effects of the crisis ranging from diminished customer demand to disrupted supply chains. IHS Markit estimated a 20% decline in full-year 2020 sales, compared to the previous year.
But even before the arrival of COVID-19, organizations and their employees were having to contend with widespread change and transformative trends across the industry, including the accelerating shift towards electric vehicles and the growing influence of automation and artificial intelligence.
In this fast-moving, unpredictable environment, your business needs to have confidence in the talent available in your workforce, or in your ability to acquire or develop the skills required to succeed.
McKinsey research has suggested many organizations have a less than positive outlook on this front. Only 30% of the automotive supply firms surveyed felt confident they had the right capabilities to respond to current trends. A more specific finding showed only 9% of respondents were prioritizing recruiting for software architect and developer roles and system integrator positions, despite the growing importance of software and electronics in modern vehicle manufacturing.
If you're concerned about skills gaps and how they could hold your business back, you need a clear plan to attract and retain top automotive industry talent.
offer competitive pay and benefits
First and foremost, you need to ensure the basics of your remuneration packages are up to standard, in the context of what your ideal candidates expect and what your competitors are offering. There are many factors that come together to determine the attractiveness of a job and whether or not people want to work for you, but it's safe to say that competitive pay and benefits will always be a key consideration.
Our 2021 Employer Brand Research, which collected the views of some 190,000 workers across 34 markets, revealed that attractive salary and benefits remained the number one reason to choose an employer, cited by 62% of respondents. It was particularly important to middle-educated employees (66%) and women (65%), and topped the list of drivers in four out of five global regions, with the exception of Latin America.
So how do you make sure your compensation packages are competitive? The most important thing is to do your research, so you can stay relevant and up to date with what's happening in the automotive sector right now, and what workers expect from their employers. Look into what your competitors are offering and average pay for particular roles in the industry. Location is another important consideration, since salaries vary across countries and regions, depending on local factors such as the availability of skilled workers and the cost of living.
If you're facing particularly acute skills shortages, you may have to be prepared to pay more to acquire people with the specific capabilities, experience or knowledge you seek. However, it's also worth remembering that pay and benefits, while important, are not the only things that matter to employees. Research has suggested that, in the 'new normal' created by COVID-19, many people are attaching more importance to work/life balance, flexibility and mental health.
Being able to offer a well-rounded, positive employee experience that reflects these priorities could therefore prove crucial for automotive firms seeking top-quality talent.
We have produced a checklist summarizing some practical steps you can take to optimize your talent attraction and retention.
provide job security
The auto industry is one of many segments of the global economy that has experienced wide-scale change and upheaval in recent times. Businesses and workers are having to adjust to a range of challenges and disruptions that will shape how the sector operates in the future.
This was recently put into context by the European Automobile Manufacturers' Association (ACEA), which published an open letter to Frans Timmermans, executive vice-president of the European Commission, calling for a dedicated framework to help the automotive workforce adjust to changes taking place in the industry. The ACEA noted that the European Green Deal will accelerate the transformation of the automotive supply chain, while the push to achieve climate neutrality by 2050 will require "a rapid strengthening of the policy instruments covering the automotive industry".
The open letter continued: "This is an industrial revolution of historic proportions. Workers dependent on the automotive industry in Europe currently face fast-moving forces of change. Rapid decarbonization is intensifying economic change in the sector, with restructuring also driven by the aftermath of the COVID-19 crisis, digitalization and as a result of broader trade and market developments."
For the workforce, one of the most likely consequences of all this change and unpredictability is increased concern over job security. To attract the talent you need to grow and retain the valuable employees you already have, you'll need to demonstrate that you're a stable organization that is committed to helping its people build long and fulfilling careers. That might involve providing evidence of recent growth, financial performance or the proportion of your workforce who have been with you for several years.
This is a particularly important consideration for automotive businesses, with our research showing that financial health and job security are among the most common values associated with employers in this sector.
Learn more abouthow to optimize your talent attraction and retention
support skills development
Retaining talent is just as important as acquiring it if you want to put your business in a position to succeed in the long term. One of the strongest actions you can take to improve retention by demonstrating your commitment to your employees is to invest in their ongoing professional development.
Introducing clear processes and development pathways that enable the reskilling and upskilling of your workforce will encourage people to stay with you to boost their long-term employability and earning potential. This also helps the business by expanding the range of skills and knowledge available within the labor force.
From a recruitment perspective, establishing a strong track record for supporting your employees as they learn new things and progress in their careers will strengthen your employer brand. This could give you a crucial advantage over competitors when you're looking to hire in-demand talent.
Practical steps you can take to plan and implement successful upskilling and reskilling programs include:
- Conducting a skills audit to understand your current capabilities and identify gaps that need to be filled
- Setting specific, relevant and measurable goals
- Collecting data and introducing metrics that help you track progress towards these objectives
- Surveying and collecting feedback from employees to plan learning methods and journeys that work for them
Upskilling and reskilling could prove more important than ever for companies in various segments of the automotive industry in the coming years, particularly in light of the tech-driven change taking place in the sector.
The International Labour Organization (ILO) published a report noting that the sector has reached a 'turning point' and faces 'an increasingly uncertain future'. It highlighted key drivers of change including:
- Technological advances, with auto industry investments in new technologies estimated at US$82 billion (€69.3 billion) in 2020
- Supply chain digitalization
- The growth of electric and autonomous vehicles
According to McKinsey's research, only 1% of vehicles sold in 2020 offered partial autonomous driving, but by 2025, 60% of the top 20 original equipment manufacturers plan to have a level-four autonomous vehicle in their product range.
In this environment of rapid change and widespread disruption, automotive workers will be more likely to join and stay with businesses that can help them develop their skill sets and future-proof their careers.
prioritize health and safety
Protecting the health and safety of your employees should always be your top priority as an employer. It's a particularly important consideration in industries such as the automotive sector, where the environments in which people work and the various tools and machinery they use could put them at higher risk of injury.
According to the ILO's research, the industry has made significant improvements in health and safety throughout its history, but remains relatively hazardous. Figures from the US showed that 6.3 out of every 100 full-time workers in motor vehicle manufacturing sustained some kind of non-fatal occupational accident or illness in 2018. This is significantly higher than in other hazardous sectors, such as mining (2.3 out of every 100 workers) and basic chemical manufacturing (1.3 out of every 100 workers).
Furthermore, businesses today need to be aware of the possibility that health and safety will be a bigger concern for employees in the wake of the COVID-19 pandemic. The crisis brought attention to how spending a lot of time in enclosed spaces with others can pose a threat to people's health, so jobseekers and existing workers alike will be keen to see what actions you're taking to keep them safe.
You can demonstrate your commitment to health and safety by taking actions such as:
- Creating a dedicated section in your company policies that explains how you adhere to ethical and legal standards in this area
- Taking a collaborative approach that gets workers involved in sharing their everyday challenges or concerns, and developing solutions
- Gaining executive buy-in and commitment to the highest standards of health and safety, to show how seriously the business takes this issue
- Collecting data to gauge progress and inform future actions and initiatives
Another common repercussion of the pandemic for many employers is an increased focus on flexible working arrangements. Businesses all over the world had to find ways to maintain operations while adhering to physical distancing restrictions, which for many involved a large-scale shift to remote working.
While this isn't an option for some roles - factory production and manufacturing jobs, for example - automotive industry workers who are able to do their jobs remotely (such as sales, finance, HR and admin support staff) might expect it to be a permanent option going forward. Those employees who do have to be based on-site could be interested in other forms of flexibility in their jobs, such as compressed or adaptable hours.
Embracing flexible working and giving people more control over how, when and where they work is a good way to reward your staff and keep them engaged by helping them achieve a good work-life balance. It can also be a key benefit to include in your job descriptions and a strong incentive to encourage employees to stay with you for longer.
Furthermore, research by the World Economic Forum has highlighted the business benefits that can be achieved through flexible working, such as:
- Higher levels of staff productivity and engagement
- More efficient and inclusive communication
- Breaking hierarchies and silos
- Turning office space into a hub for collaboration and innovation
focus on your employer brand
As emphasized in McKinsey's recent survey, skills gaps and capability constraints are a big issue in the automotive industry, with the challenge of attracting, developing and retaining talent now 'more critical than ever'.
Working with an HR solutions partner can give you access to a range of data and intelligence on what job seekers in the automotive industry are looking for, which in turn can inform your efforts to recruit and retain high-level talent.
According to our 2021 employer branding insights, automotive is the third most attractive sector for workers worldwide, and the top five values attributed to the industry are:
- Financial health
- COVID-19 safety
- Strong reputation
- Job security
- Career progression
Putting these principles at the heart of your efforts to acquire and retain high-value workers could prove critical to your future performance in this fast-moving and demanding sector.
We have produced a checklist highlighting some of the practical steps you can take to optimize your talent attraction and retention.